NHPC - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.4

⚡️ Fundamental Analysis: NHPC Ltd.

NHPC is a large-cap PSU in the hydropower sector. While it offers stability and consistent dividends, its capital efficiency and growth metrics are relatively modest, making it more suitable for conservative investors seeking income rather than aggressive capital appreciation.

Metric Value Implication

Stock P/E 28.1 Fairly valued vs. industry PE of 41.2 — not cheap, but not overpriced

PEG Ratio -5.22 Negative — unreliable due to inconsistent earnings growth

ROE / ROCE 7.67% / 7.39% Weak — low capital efficiency, typical of utilities

Dividend Yield 2.26% Attractive — good for income-focused investors

Debt-to-Equity 1.00 High — capital-intensive sector, but manageable for a PSU

EPS ₹2.99 Modest — limits valuation upside

Profit Growth (QoQ) +57.0% Strong — seasonal or one-off, needs consistency

📉 Technical & Trend Analysis

Current Price: ₹84.0

DMA 50 / DMA 200: ₹85.8 / ₹84.5 — trading below both, short-term weakness

RSI: 40.8 — approaching oversold zone

MACD: -0.40 — bearish momentum

Volume: Below average — low conviction

✅ Is It a Good Long-Term Investment?

Moderately suitable for long-term holding, especially for conservative or dividend-focused investors. NHPC offers stability and consistent payouts, but lacks strong growth or capital efficiency. It’s more of a defensive play in the power sector.

🎯 Ideal Entry Price Zone

Buy Zone: ₹75–₹80

Near technical support and below DMA levels

Accumulate only if dividend yield stays above 2% and ROE improves

Avoid chasing above ₹90 unless earnings growth becomes consistent

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: 3–5 years — for steady dividends and gradual appreciation

Exit Strategy

Partial Exit near ₹105–₹110 if valuation stretches (P/E > 35)

Hold if dividend yield remains >2% and PAT growth sustains

Reassess if ROE/ROCE stagnate or debt levels rise further

Would you like to explore better dividend-paying PSUs like Power Grid, NTPC, or Coal India for comparison?

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